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Listen to the latest episode of the Emerald Wit & Wisdom Podcast (06/12/24)

Good morning.

Markets are little changed this morning as investors await today’s Fed announcement(s) due out this afternoon. Chairman Powell finds himself playing a surprising game of Whack-a-mole … as tariff threats lead to worries over inflation (which could lead to higher rates) while, at the same time, the new administration wants rates to be cut … and cut sharply.  For those keeping score, the Fed strives for independence from political pressure … the Chairman term goes to May of 2026 … and requires a 50% vote in the Senate once appointed by the President.

One thing you can be sure of is that this week’s FOMC meeting has a steady supply of Tums.

Meanwhile, market participants are still trying to get their arms around recent claims surrounding DeepSeek … and just this morning, Alibaba announced they have a better mousetrap.  Investors (okay … I mean me) are having a tough time determining the effect, wondering if Nvidia has suddenly developed a chink in its armor … as many begin to wonder to what degree its leadership role may have been diminished.

The Trump Administration made an interesting move yesterday by offering federal employees (with some departmental exceptions) the option of resigning … while receiving full benefits through September.  While the forecast is for 10% of workers to accept this … many questions come into play … and I have yet to see discussions surrounding the effect if many more than this decide to resign or what this would do our unemployment rate … and its own effects. It is early … as the offer is new … but the BBC reports the White House deputy chief of staff for policy, Stephen Miller, claims federal workers are “left of center” and this is a way for the new administration “… to get control of government.”

For you mathematicians out there who are planning when to take social security, there is something interesting … and a little scary … to consider.

Most models show the advantages of waiting until the age of 70 to take social security.  Calculations are relatively easy, as the numbers can be plugged into an excel spreadsheet … but there is an important wrinkle to think over … for what if the payout is actually reduced?  While individuals gain 8% a year (in monthly payout) by waiting beyond their “full retirement year” … plugging in a rumored 17% reduction ten years from now, certainly changes the calculation.

While nothing has been announced, rumors are flying wildly … and with the growing percentage of the retired elderly vs. “working” people … it appears something will certainly need to be done.

This is just something to keep an eye on … which is another reason to make sure retirement planning is done early in your career. And if you can’t do it on your own, get help. Many Certified Financial Planners (CFPs) are standing by.

That about wraps it up for today as I am planning to run out to Costco, battle other shoppers and try to grab some eggs before they run out again … as prices continue to soar.

Wish me luck.

My afternoon shopping trip will, no doubt, be filled with great egg-citement.

Have a great day,

Joseph G. Witthohn, CFA

Have any questions? Please contact info@teamemerald.com

 

 

 

A Look At The News | January 29, 2025

As of 11:58 AM today:
Many federal workers are being offered a “buy out” … in which they can get full pay for almost 8 months. While the view is 10% will accept this, I suspect it may be a bit higher (CNBC)

https://www.cnbc.com/2025/01/28/trump-buyouts-federal-workers.html

 

A calculation many go through is figuring just when to take social security. But if the payout is cut in 2035, as many fear … the math certainly changes (Fool)

https://www.fool.com/retirement/2025/01/29/social-securitys-day-of-reckoning-is-getting-dange/

 

Views have been that babies tend to learn language at a very young age … but the experts might have underestimated this … and kids might have an awareness much earlier (ScienceAlert)

https://www.sciencealert.com/babies-learn-language-even-earlier-than-we-realized-study-reveals

 

Sure, we have heard the promise before … but advancements are being made regarding self-driving vehicles.  Will this really be improved and available this year? (Benzinga)

https://www.benzinga.com/markets/equities/25/01/43295163/elon-musk-says-unsupervised-full-self-driving-begins-as-tesla-can-now-drive-itself-from-factory-

 

Less confusion is about to occur … as Starbucks is going to reduce its menu by around 30% … resulting in less time wasted figuring out just what the heck the customer is ordering (CNN)

https://www.cnn.com/2025/01/29/food/starbucks-menu-changes/index.html

 

There are a lot of self-help books out there … and based on the sales volume a lot of people certainly need help.  But is this really helping people other than the authors? (JoanWestenberg)

https://www.joanwestenberg.com/the-great-self-help-scam-an-industry-built-on-making-you-feel-broken/

 

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The statements above are supplied for educational purposes only. The statements depict the viewpoints and opinion of the author and are not necessarily the views of Emerald Asset Management or its affiliates. The information described herein is taken from sources which are believed to be reliable, but the accuracy and completeness of such information is not guaranteed by us.